Everyone, the financial market has been extremely lively recently, with everyone wildly spreading news about the Fed cutting rates in September. Even Trump has joined in the conversation, making it feel like the entire financial world is about to 'explode' with excitement. Friends in the cryptocurrency market are especially enthusiastic, eagerly anticipating the bull market. But we need to calm down and think carefully about this; it's really not that simple, as there are many complexities behind it, and we must not be deceived by appearances.
1. Federal Reserve: It's not as easy to be influenced by the 'dovish' side as you think.
Despite Trump appointing a few dovish officials, the core members of the Fed, especially Powell, are quite firm. He clearly stated that any rate cuts must be based on concrete inflation data, and it's not enough to just shout 'cut rates'. The Fed has a significant responsibility; it must maintain market stability and ensure healthy economic growth. The greatest fear is inflation rising again, which could undermine the confidence the market has painstakingly built. The speculative sentiment in the cryptocurrency market may be high, but the Fed will not be swayed by that; they make decisions carefully.
2. Inflation: The 'super monster' on the road to rate cuts.
Although CPI and PPI seem to be showing some signs of decline, core inflation remains high, indicating that price pressures have not been truly resolved. If the Fed hastily cuts rates in September, it would be disastrous, like pouring a bucket of oil onto a raging inflation fire. If inflation spirals out of control, the Fed will have to repeatedly adjust its policies, which poses a significant risk to the cryptocurrency market. Are you really prepared to face this terrifying uncertainty?
3. Employment market: The economy is as stable as an 'old dog', and there's no rush to cut rates.
Shift your focus away from the cryptocurrency market and take a look at the broader economic landscape. The U.S. employment data is impressive, and wages are steadily rising. Clearly, there are no signs of recession in the U.S. economy. In such times, the Federal Reserve generally lowers interest rates to put out fires, but with the economy doing well, there's no fire to put out, so the necessity for a rate cut is quite low. For the cryptocurrency market, this means that funds may still be stuck in a state of 'suffocation' due to tightening U.S. dollar liquidity. Don't expect a relaxed market to bail you out in the short term; fantasies about rate cuts leading to a funding frenzy may just fall flat.
4. Market expectations: Overheated speculation needs to cool down!
Currently, those in the market, including investors, regard rate cuts as a magical remedy for the market. Everyone is rushing in, and funds in the cryptocurrency sector are following the trend, making it easy to create bubbles. The Fed has stated that policy decisions are based on data and will not be swayed by market sentiment. For those in the cryptocurrency sector, if you are still blindly following the trend, be careful not to become the 'cut vegetables' of this market. The market is overheated; we need to calm down and be rational to protect our wallets.
5. Global situation: A 'big trouble' adding pressure to the Fed's policies.
It's not just a matter for the U.S. The global economic recovery is slow like a sluggish snail, and geopolitical tensions are rising, which adds significant pressure to the Fed's policy decisions. With such a complex and unstable global situation, can the Fed afford to be careless in making policy decisions? The cryptocurrency market is global, so we need to keep an eye on changes in the macro environment, as there are many hidden risks.
Cryptocurrency trading guide:
- At this stage, liquidity is likely still tight, so don't be blindly optimistic about going long. The market is like a roller coaster, with high risks, so we need to be cautious.
- The critical inflation data and employment reports in the second half of the year need to be closely monitored, as they are the 'golden keys' to determining whether the Fed will cut rates. Once we see significantly positive news in these data, we can make investment decisions with more confidence.
- We must never lose our risk awareness and must manage our funds well. Don't let short-term market fluctuations confuse you, and don't get lost in the crowd. Properly manage your funds to protect your principal in this unpredictable market.
- Don't ignore the Fed's meeting minutes and officials' speeches; pay close attention, as you might catch hints of policy changes in advance and get ahead of the game.
Friends, even though the calls for the Fed to cut rates in September are loud in the market, the logic behind it is as thin as paper. If we want to survive in the cryptocurrency market, we must remain calm and rational, and not let those superficial expectations of rate cuts cloud our judgment. Only by steadily focusing on the data and policy changes can we seize real opportunities amidst the market's tumultuous waves, avoiding being misled by false prosperity, and navigating through this complex financial market successfully.
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